Although South Africa`s road, rail and port infrastructure rank high in global competitiveness, the cost of logistics both in SA and the Southern African Development Community remains high in comparison with the global community.
Two specific areas of concern identified by the Moving South Africa project are the lack of support for export competitiveness and low levels of system sustainability. One of the primary problems is the lack of service predictability, which leads to excess inventory and working capital requirements for companies.
According to eFreight, which owns a majority stake in the newly formed FreightMatrix Africa, interviews with freight customers revealed a significant level of dissatisfaction with key aspects of the industry.
While customers were generally satisfied with road freight prices and service, they were significantly less satisfied with rail general freight prices and service, and highly dissatisfied with current levels of service, especially delays at the ports.
For the inland leg - including ports - 60 percent of customers felt that transit times were too high, and these customers wanted to see a 37 percent reduction in the overall inland transit times. Outside the ports, 73 percent of customers also expressed a strong preference for improved transit times on the maritime leg of the shipment.
The company argues that an adversarial relationship has arisen over time between shippers and logistics service providers and says that consequently the underlying logistics excellence principle of collaboration has diminished significantly and supply chains are suffering even more.
The market opportunity to facilitate collaboration between shippers and logistics service providers and to improve South Africa`s competitiveness is significant. It sees FreightMatrix-Africa as a neutral logistics marketplace for these parties to come together and collaborate for mutual benefit.
The new company, a joint venture between eFreight and FreightMatrix, which is a majority-owned subsidiary of Nasdaq-listed i2 Technologies, is part of a worldwide network of FreightMatrix logistics markplaces where carriers and shippers, third party logistics providers, freight forwarders and brokers can procure, plan and execute logistics online.
This logistics marketplace could assist the SADC region by lowering costs and improving service levels, thereby overcoming many of the problems mentioned above. In essence, FreightMatrix-Africa will offer players in the logistics industry a central, integrated online system where they can buy and sell their services.
FreightMatrix is an Internet-based logistics marketplace, and is designed to enable shippers, carriers, third-party management providers, forwarders and brokers the capability to transact shipments with their customers, as well as manage internal workflows, control their financial management, improve customer service and sell services to companies participating in i2 Technologies` TradeMatrix e-commerce network. It also provides planning services to enable logistics providers to get the most of their equipment and operations.
B2BAfrica - the new e-logistics division of transport parastatal Transnet - has now entered into a partnership with FreightMatrix Africa. Chris Jardine, B2BAfrica chairman and acting CEO, says the agreement allows B2BAfrica to "provide a seamless chick-through capability between our e-logistics, e-procurement and marketplace vertical offerings".
Gus Cohen, e-Freight chief executive, says: "Strategically the e-logistics marketplace will reduce the cost of logistics, free up working capital, create visibility of freight in supply chains and increase capacity utilisation for B2BAfrica customers".
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